November, 2009

Goldman Sachs estimates that the credit has already resulted in 200,000 sales this year, and this expansion could well help to continue to stabilize the housing market and we could even see a further rise in prices.

And the NAR released it’s state-by-state existing-home sales and metropolitan area median home prices for the 3rd quarter this week, and things are looking up. Most states continued to experience rising existing-home sales in the third quarter, with prices moderating in many metro areas. Total state existing-home sales, including single-family and condo, increased 11.4 percent, and are now 5.9 percent above the pace set in the third quarter of 2008. Sales increased from the second quarter in 45 states and the District of Columbia; 28 states and D.C. saw double-digit gains. Year-over-year sales were higher in 32 states and D.C.

But prices were still down over this time last year, due in part to the large number of distressed sales weighing down median home prices because they sell at a discount relative to traditional homes.

On the up side, we are starting to see a turnaround in that trend, though. Thirty of the metropolitan statistical areas actually had price gains this quarter.

Starting in the Northeast, existing-home sales surged 16.7% in the third quarter to a pace of 930,000 units and are 6.9% higher than a year ago. Though the median price declined 9.4% to $244,500 from the 3rd quarter in 2008, there were price gains, the best of which was in Buffalo-Niagara Falls, N.Y., where the median price of $119,700 rose 4.8%.

Looking to the Midwest, existing-home sales jumped 13.2% in the third quarter to a pace of 1.20 million and are 5.2% above a year ago. The median existing single-family home price in the Midwest was down 5.5% to $150,200, but also saw one of the largest single family home price increases in the country in the Davenport-Moline-Rock Island area of Iowa and Illinois, where the median price increased 14.3% to $115,600.

In the South, existing-home sales rose 11.3% in the third quarter to an annual rate of 1.97 million and are 5.9% higher than the third quarter of 2008. The median existing single-family home price in the South was $160,000 in the third quarter, down 7.9% from a year earlier, but also saw the 3rd highest single family home price increase in the country in the Oklahoma City area, at $144,100, up 9.1% from a year ago.

Existing-home sales in the West increased 5.6% in the third quarter, 4.6% above a year ago. The median existing single-family home price in the West was $224,000 in the third quarter, which is 16.4% below the third quarter of 2008. The best metro price performance in the West was in Yakima, Washington, where the median price of $158,400 rose 2.7% from a year earlier, so there are still plenty of bargains out West.

So sales are up all over the place, clearing out a lot of that inventory, and while prices are still down on a year ago, we are seeing some considerable rises in areas across the country, which should have a knock on effect to further stabilize prices as we look towards the spring of next year.

However, in cases where a binding sales contract is signed by April 30, 2010, a home purchase completed by June 30, 2010 will qualify. So, basically, you have until midnight April 30th to sign the contract for your home, but you’ll then have up until midnight June 30th to close the deal.

The extension also raised the income limits for those applying for the credit from $75,000 for single taxpayers and $150,000 for married couples filing jointly, to $125,000 for single taxpayers and $225,000 for those filing jointly.

But! This raised limit is not, repeat not, retroactive. So for anyone who’s bought a home between January 1st and November 6th, the income limit stays the same, $75,000 for singles, $125,000 for couples.

The raised income limit only applies to homes purchased after November 6th of this year and before midnight April 30th of next year, so if you were earning over $75,000 or two of you were earning over $125,000 and you bought your first place before November 6th, you still won’t qualify for the tax credit.

Now lets take a look at the new provision of a $6500 credit for repeat buyers. First, this isn’t for people buying a holiday home, this is for people who want to move on up to a new home.

Now, this doesn’t necessarily mean that you have to sell your old house, you can keep it or rent it or do whatever you want with it, but the house you’re buying will have to be your primary residence. You’ll have to live in it for at least 3 years, otherwise the IRS can come and ask for that money back. To be eligible, you must have owned and lived in your previous home for five consecutive years out of the last eight.

Now, bear a couple of things in mind here, as there are some similarities to the $8000 credit. The top price limit for both remains the same — $800,000 or less. Just like the first time buyers credit, it’s actually 10% of the purchase price up to $6500, so if you bought a place for $60,000 you’d only get $6000, or 10%, back. But if you buy anything over $65,000, you get the full $6500 credit. You also have until April 30th to sign a contract and until June 30th to close.

The income brackets for repeat buyers are the increased income brackets from November 6th, $125,000 for single taxpayers, $225,000 for couples filing jointly.

One of the biggest and most important questions floating around out there is, if you fulfilled all the requirements, lived in your old place for at least 5 years straight and so on, but bought your new place before November 6th of this year, do you get $6500? The answer is no. For repeat buyers, this is not a retroactive law, so it only applies to homes purchased after the president signed the bill into law, which was November 6th.

Still have questions? There is a website that deals specifically with the tax credit, and that’s www.federalhousingtaxcredit.com.

So make that your first stop and good luck from all of us at real estate today in the purchase of your new home.

• There’s nothing as un-festive as a last minute panic, so make sure you have everything prepared well ahead of time. If you’re rushing around, frustratedly clearing clutter when your guests arrive, they aren’t going to feel very welcome, they’re going to feel in the way. So empty the boxes out of the spare room in good time and put in a few nice welcoming touches, like candles or fresh flowers.

• This is a real life saver: make a spare set of keys for your guests. Not only will this allow them to come and go as they please, making them feel at home rather than on lockdown, but it frees you up too, so you wont have to wait in or wait up.

• To supplement those sleepovers, invest in an inflatable air mattress. These things are invaluable, as at the touch of a button, presto, you’ve got an extra bed. And during the day, you can deflate it, roll it up, and put it in a cupboard out of the way. Just remember to check for leaks.

• Give your visitors that real “welcome guest” experience that they would get at a fancy hotel by laying out a basket of travel size soaps, shampoos, lotions and a pile of fresh towels in the bathroom.

• If you’ve got visitors coming from far away, from a different time zone maybe, then you could run into that age old problem of your guests waking up far earlier than you. Heck, this can happen if you have people coming from the next town over! You might have even experienced this from the other side of the guest room door, sitting fully dressed in a small bedroom waiting for your hosts to wake up. So why not put a little TV, perhaps with some headphones, in the guest room, along with some books and magazines. That should help keep everyone comfortable no matter the hour.

• Your guests may want to do some exploring of your vicinity on their own, so draw up a map of your neighborhood and environs, pointing out points of interest, and get them a guidebook flagging any special places or activities that they might be interested in.

• Make sure to provide a surface or suitcase rack where your guests can open their luggage. There’s nothing worse than having to spread out your belongings all over the floor, so clear out part of the closet and provide some hangers.

• Have you ever had that experience of being at someone’s house, you want to get a glass of water and you have to go through every cupboard in the kitchen till you find the right one? Well, you’re proud of your place so give your guests the grand tour. Point out where glasses, dishes and silverware are kept, as well as tea, coffee, cereal and snacks and you can encourage those early risers to help themselves.

• To help the process along, actually set up coffee stuff for the morning. Have the percolator loaded and ready to go at the flip of a switch, or at least make sure the mugs and spoons and so on are on the counter. Let’s face it, everyone feels better after some morning coffee.

• If you’ve got guests coming for a special event, let them know what to expect as far as household schedules are concerned. Clarify when people get up and go to bed, and mention any thing special that is in the works to minimize miscommunications.

Of course, the main thing is to have a good time with your guests. Let’s face it, you invited them there for a reason, so enjoy the time you get to spend together, kick back and enjoy some holiday cheer. In fact, you may actually hate to see them go.